Sun.As elsewhere, most African countries have difficulty establishing a framework for better protection of biodiversity, while others find it far below the list of challenges they have faced in recent years. On the other hand, financial circles are just beginning to realize the impact of human activities on the environment and ecosystems. This applies to several African banks and financial institutions, including FirstRand Ltd, Standard Chartered, Access Bank and Equity Group or the insurer Sanlam, as well as the pan-African bank Ecobank based in Togo. Together with the United Nations Economic Commission for Africa and the UK-funded development agency FSD Africails, they founded the African Alliance for Natural Capital. An initiative that aims to invest in climate and nature to make biodiversity a priority financial issue.
It all started with one observation: while Africa is home to the world’s largest population of large mammals, as well as the Congo Basin, the second largest tropical forest and more than 60% of its gross domestic product depends on nature. , immediately after Indonesia and India, according to the World Economic Forum, we must now take into account the fact that the destruction of this biodiversity is also a financial loss. The calculation is not easy, but financial institutions have taken it for another measurement – carbon emissions, where standards and certificates have emerged to ensure the credibility of the goals announced by companies to reduce greenhouse gas emissions.
And the need to integrate nature into financial decision-making is particularly acute in Africa, where biodiversity is declining rapidly. Between 1970 and 2016, the population of mammals, fish, amphibians and reptiles on the continent fell by 65%, according to WWF. The result: biodiversity loss directly threatens financial stability.
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Huge challenges for Africa, where climate change is already hitting
Responsible management of Africa’s natural capital, including its water, soil and forests, “creates fantastic opportunities and contributes to the growth and development of the continent,” said Rachel Antwie, Head of ESG Group at Ecobank. The challenge is twofold: on the one hand, the African Natural Capital Alliance wants to focus its efforts on shifting financial flows from destructive activities to more sustainable practices, and on the other hand, to influence the standards of global nature risk management structures. to display the African context.
The task promises to be difficult, as Africa is already facing a climate crisis. As for the fight to preserve biodiversity, it is not always popular on the continent. In Gabon, for example, in a country that has made the protection of its biodiversity a priority and advocates for “biodiversity loans” on the model of carbon credits, residents of remote areas who live from what they plant and do not accept hunting. questions in the same way. In this small Central African country, the endangered forest elephant, whose population has shrunk by 86% in 30 years, has doubled in 10 years to about 95,000, including some who regularly devastate food crops. “Biodiversity loss and climate change are as interdependent as solutions,” said Madeleine Ronquest, environmental, social and climate risk manager at FirstRand Ltd.
There are ways to think about innovative financing.
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Hear the voice of Africa in the global debate
According to McKinsey and Credit Suisse, the biodiversity sector still suffers from a funding shortfall of $ 598 billion to $ 824 billion a year. Everyone agrees that more money needs to be invested in protecting biodiversity, but opinions differ on the amounts and sources. The African Group, represented by Gabon, Brazil, India, Pakistan, Argentina and other Latin American countries, has asked developed countries to “at least $ 100 billion a year as a first step, then $ 700 billion a year by 2030 and beyond” for countries developing. . Developed countries are ready to put more on the table, but not so much. They advocate the mobilization of all resources – national, official development assistance, private funds.
“We are excited to be a founding member of the African Natural Capital Alliance to bring our expertise and voice to this important global program to manage nature’s risks and opportunities,” he said. Dp James Mwangi, Managing Director of the Group and CEO of Equity Bank, during the training COP15 on Biodiversity in Kunming, China. Following the 2015 Paris Agreement, which called for “financial flows compatible” with a low-carbon trajectory, no such commitment to biodiversity is needed. COP15 aims to establish the same principle for nature.
“The Equity Group’s strategy, set out in our Recovery and Sustainability Plan for Africa, is to catalyze Africa’s natural resource-driven industrialization. We understand that nature is a valuable asset that drives our economy, but it also has a significant impact on our lives and livelihoods. For this reason, we must protect this asset, as well as find ways to use our natural capital in a sustainable way for the socio-economic prosperity of the people of Africa, “he added. James Mwangi. This pan-African initiative came at a time when financial institutions are increasingly consulting with each other globally. The African Natural Capital Alliance is a member of the Working Group on Disclosure of Nature-Related Information (TNFD), building on the experience of the TCFD (Carbon Disclosure Task Force) on carbon emissions. In 2023, it should publish its operating structure.
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